The dangerously unbalanced world of global governance

Nearly two years after the U.S. financial system's collapse and the worldwide economic catastrophe it triggered, Canadians can be forgiven for assuming that globalization is a dead 1990s issue – something we all used to worry about before Osama bin Laden, Iraq and Afghanistan distracted us with their more pressing and far bloodier threats. But what set the stage for the big banks' near destruction of the world's economy in 2008 occurred 15 years ago when the World Trade Organization was born and dangerously unbalanced the emerging system of global governance.

At its launch in 1995, the WTO was praised as an almost utopian forerunner of global governance. After all, it gave concrete expression to mankind's yearning for universal rights and the global rule of law and even spoke the language of freedom.

The catch lay not in the WTO's logic but in its asymmetry. The rights it proclaimed were not for citizens but for transnational corporations. Its laws certainly ruled universally, but they promoted a deregulated marketplace, not a co-ordinated global governance. The principles of freedom put into operation by its rules extended the global sway of already powerful transnationals; they did not empower the wretched of the Earth.

This most powerful and, for many, most disturbing manifestation of globalization is now half forgotten, but the WTO – along with such regional counterparts as NAFTA – needs to be taken seriously again, because this international economic regime has supra-constitutional clout in the sense that its principles and rules prevail over its member nation-states' domestic constitutions.

Principles: Applying “national treatment” to investment prevents Ottawa and the provinces from strengthening a domestic industry without offering the same subsidies to those very foreign transnationals with which the local firms had been hoping to compete more effectively.

Rules: The WTO extended to the Big Pharma giants such ironclad intellectual property rights that it is virtually impossible for cheap, generic versions of patented drugs to be made available for battling such Third World pandemics as HIV-AIDS.

Arbitration: Further constitutional characteristics of this economic regime are strong transnational judicial processes that can make rulings in disputes between governments and corporations and be effectively enforced.

A tremendous imbalance characterizes the disparity between the imperative, hard-law nature of this supra-constitution and the hortatory, soft-law character of most other multilateral regimes.

That states can ratify all sorts of human-rights, labour-standard or environmental conventions without feeling obliged to respect their commitments was made clear by our last three prime ministers' cavalier treatment of the Kyoto climate-change protocol. Jean Chrétien signed it on a whim, Paul Martin proceeded to ignore its implementation and Stephen Harper had no compunction declaring that he would not even pretend to comply.

Even when governments wish to keep their soft-law commitments, they may find themselves overruled by the economic supra-constitution. Using NAFTA's dispute mechanism, the U.S. waste-disposal company S.D. Myers successfully overturned the Canadian government's decision, made in compliance with the Basel Convention prohibiting the export of dangerous chemicals, to forbid the shipment of PCBs to the United States.

Globalization's constraining effect on state action has provoked vastly increased activism in international civil society, where Canadians still punch above their weight. The world's most effective environmental NGO, Greenpeace, was founded in Vancouver in 1971. A Canadian doctor, James Orbinski, was presiding over Médecins sans frontières when it received the Nobel Peace Prize for its outstanding ministrations in zones of conflict, including his own during the genocide in Rwanda.

These examples give some sense of how citizens have tried to correct the constitutional imbalance that is constraining the regulatory state, exacerbating global inequalities and threatening the planet's survival as a hospitable environment for human life.

But activism is not enough. If the market's capacity to self-destruct is to be contained, governments must get in step with their citizenry to give clear priority to human emancipation rather than market liberation.

This has happened before. It was pressure from civil society that pushed the Liberal government in the 1990s to lead the campaigns to ban the use of anti-personnel land mines and to establish the International Criminal Court. Such rebalancing of the global constitution must happen again.

Stephen Clarkson is a senior fellow at The Centre for International Governance Innovation. This is adapted from the Viscount Bennett Lecture he delivered yesterday at the University of New Brunswick's Faculty of Law.

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